Subject_1 BILL OF EXCHANGE. Subject_2 DIVISION IV.
Possessor's recourse against the Drawer and Indorser.
Subject_3 SECT. II.
Negotiation of Bill.
Alexander Brown, Merchant in Edinburgh, v. Alexander Hume of Coldinghamlaw
Date: 14 November 1705 Case No. No 126.
A bill was protested for non-acceptance at the term of payment. It was afterwards accepted qualifiate payable after fourteen days. When these expired, it was again protested. Found, that recourse against the drawer was not lost. This was an inland bill for a small sum. The rules of negotiation were not then well ascertained. See No 130. p. 1552.
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Alexander Hume of Coldinghamlaw, having, in July 1703, drawn a bill for L. 146 Scots, upon Silias Foirside, in Eymouth, (who owed him the like sum by bond) payable to Alexander Brown, merchant in Edinburgh, at Lammas thereafter, which was protested for not acceptance: Upon the 2d of August, Foirside accepted the bill, payable the 16th day of that month; upon the 5th and 17th days, the possessor protested for not payment; and, in September following, received from Foirside L. 100, in part of payment: And thereafter obtained a decreet against the drawer, before the Commissary of Lauder, for the remainder. He suspended upon this reason, That the charger had not duly negotiated the bill, in so far as he, at his own hand, had prorogated the term of payment to the 16th of August, without the drawer's advice or consent; and had neglected to protest, for not payment, within the three respite days after the term in the bill; and had not discussed the acceptor by using due and timeous diligence against him, before he turned bankrupt; nor did so much as return advice to the drawer by the first post, that the bill was protested for not payment, to the end he might have taken course with the acceptor: And therefore, the drawer was no further liable; but the charger must seek the acceptor for what he wants of payment of the bill.
Answered for the charger:—He had duly negotiated the bill, in protesting for non-acceptance upon the 30th July 1703, and for not payment the 5th of August, the last of the respite days: By which two protests, he secured to himself both the drawer and the acceptor, as having the drawer's effects the time of protesting the bill. 2do, The taking acceptance, after protesting for not-acceptance, payable fourteen days after the term of the bill, was an advantage to the drawer; because Mr Brown could have got Mr Foirside decerned in payment, by an ordinary action, as having the drawer's effects; and the insisting that way, would have exhausted more time than fourteen days, besides the expence and trouble. As Mr Brown's procedure was to the drawer's best advantage; so it was conform to the merchant custom; for, according to Marius, upon bills of exchange, p. 21, the possessor of a bill having protested the same, in the terms of its draught, can take an acceptance as the same is offered. And Mr Forbes, chap. 6. concerning protesting of bills, observes, That a bill being duly protested for not-acceptance and payment within: the respite days, preserves both the drawer and acceptor. 3tio, The merchant law prescribes no further diligence than duly protesting for non-acceptance and not payment; and if merchants should not have ready recourse against the drawers of hills, whom they principally trust with their money, but be obliged to prosecute acceptors with utmost diligence, that would involve them in insuperable difficulties, especially when the sum is small. If any person, for example, shall draw a bill upon a Zealand merchant, payable at Edinburgh, and accepted by him there, the possessor, by duly protesting the bill for not payment, has immediate access against the drawer, and can never be obliged to go seek his money in Zealand. 4to, There was no necessity of writing advice to the Merse, where the drawer lives, when he was at Edinburgh, where the charger had occasion to speak with him every day, and could depone, that he acquainted him that the bill was not honoured.
Replied for the suspender:—That it had been a greater kindness to him, if the possessor had not prorogued the term of the bill, but returned it protested for not acceptance, that the drawer might seek to his own security, by using execution upon the designed acceptor's bond, which he delayed in confidence that his bill was complied with. 2do, Albeit the possessor might have protested for not acceptance, he could not protest for not payment till elapsing of the term to which it was prorogated; but could only pursue in an ordinary action the person drawn upon, as having the drawer's effects. Nor could he recur against the drawer,. the protest for not acceptance being taken off and past from by the posterior acceptance and partial payment. 3tio, A simple protest, which is but the assertion of a notary, cannot be all the diligence required in the possessor of a bill; for, after acceptance, the drawer is only liable subsidarie, the acceptor, who is considered as principal debtor, being first discussed; and the possessor should use the summary diligence allowed by the act 20th, Par. 3. Cha. II. against the acceptor, in case of not payment, before any recourse against the drawer; otherwise that recourse had been competent summarily upon the registrate protest, and not by way of ordinary action. Mr Forbes also, in his treatise of Bills of Exchange, p. 93. asserts, That any accident happening to the acceptor, after the term of payment, should be upon the possessor's risk; it being just that the drawer should not suffer through his neglect.
The Lords found the drawer of the bill liable, and repelled the reasons of suspension.
